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3 Weight-Loss Stocks in Focus on Rising Obesity Fears

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The United States has the highest percentage of overweight adults in the world. A fresh report by The State of Obesity shows that healthcare costs related to the condition range from $147 billion to $210 billion every year.

In fact, North America is expected to play a significant role in the global non-invasive fat reduction market, which is likely to see a healthy CAGR till 2023.

This speaks volumes of the investment opportunities in the weight loss industry.

US Weight loss Industry: A Booming One

The nation is fighting obesity through products and services designed by its corporate giants for helping in weight loss and carrying out bariatric surgeries.  Among others, beverage giants like Coca-Cola Company (KO - Free Report) and Pepsico (PEP - Free Report) to switch to healthier drink versions. Per an article by Market Research, the U.S. weight-loss market reached a worth of $70 billion in 2018.

Weight Loss Services & Products

Commercial weight-loss companies are raking in billions, thanks to growing health awareness among millennials. A number of U.S. organizations offer app-based programs, in-person meetings, online training and diet programs. This has boosted business for retailers of health and wellness products.

Some key players in the space are myFitnesspal, The Mayo Clinic and Noom, among others. The myFitnesspal app offers day-to-day support and guidance through food and exercise tracking. The Mayo Clinic offers a unique diet programs for weight management.

Also, weight-loss pills and ketogenic dietary supplements are expected to simplify weight management procedures.

For instance, GNC Holdings offers a wide range of meal replacement and appetite control products. Additionally, bigwigs like Abbott Laboratories (ABT - Free Report) and Nestle offer diverse products like protein shakes and ketogenic diet supplements.

Bariatric Surgery

Bariatric or weight-loss surgery rates have been on the rise in the United States.

Notably, MedTech giants like Medtronic, Johnson & Johnson (JNJ - Free Report) and TransEntrix offer a wide range of surgical devices for bariatric surgeries. In fact, U.S. MedTech player Cerner Corporation recently announced a tie-up with Christiana Care Health System to provide bariatric services to its health plan members. (Read More: Cerner & Christiana Care Unite to Offer Bariatric Services)

Going by a Global Market Insights report, the U.S. bariatric surgery devices market is expected to grow at 5.6% by 2024.

Stocks in Focus

We have zeroed in on three stocks using the Zacks Stock Screener whose core business focuses on weight-loss products and consumer wellness programs. Notably, each of these stocks carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Additionally, the Zacks Consensus Estimate for each of the stocks’ earnings have remained stable over the past 60 days.

Our first stock is Weight Watchers International, Inc. (WTW - Free Report) , also known as WW. Headquartered in New York, WW is the largest provider of weight control programs in the world. WW’s core business includes weekly meetings, in which they present scientifically designed programs, group support and education about healthy eating patterns and physical activities.

Recently, the company launched WW Fresh quick-prep meals, which are chef-inspired, nutritionist-approved and ready-to-eat in 10 minutes or less.

The Zacks Consensus Estimate for current-quarter earnings is pegged at 61 cents, reflecting year-over-year growth of 64.9%.

Over the past two years, WW’s net income saw a CAGR of 180.6% to $188 million.

Next on our list is NutriSystem Inc. (NTRI - Free Report) . The Pennsylvania-based leader in the weight-loss industry offers clinically-tested NutriSystem Lean13 program, designed to deliver weight loss of up to 13 pounds and seven inches in the first month. The South Beach Diet meal delivery weight-loss program deserves a mention in this regard.

The Zacks Consensus Estimate for current-quarter earnings is pegged at 61 cents, mirroring year-over-year growth of 45.2%.

NutriSystem Inc Price and Consensus

 

NutriSystem Inc Price and Consensus | NutriSystem Inc Quote

Over the past two years, NutriSystem’s net income saw a CAGR of 56.8% to $58 million.

Investors may also keep an eye on MEDIFAST INC (MED - Free Report) . The Maryland-based company is a manufacturer and distributor of weight loss and other health-related products through websites, multi-level marketing, telemarketing, weight loss clinics and medical professionals.

The company sells weight-loss kits which include bars, shakes and drinks.

The Zacks Consensus Estimate for current-quarter earnings is pegged at $1.19, showing year-over-year growth of 98.3%.

MEDIFAST INC Price and Consensus

 

MEDIFAST INC Price and Consensus | MEDIFAST INC Quote

Over the past two years, MEDIFAST’s net income saw a CAGR of 21.7% to $28 million.

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